Back to School: Fama, French Discuss Their Work

The top proponents of the efficient-market theory on stocks, behavioralists, and bubbles.

Eugene Fama and Kenneth French have the easy banter of two brilliant minds that have collaborated and challenged each other for three decades. Fama, 74, teaches at the University of Chicago's Booth School of Business. He just won the Nobel Prize for his theory of market efficiency, which, in 1965, argued that all available information was immediately incorporated into stock prices. In 1985, he teamed up with Ken French, who at the time also taught at Chicago, but is now a professor at Dartmouth College's Tuck School of Business. Since then, "Fama and French" has been a catchphrase, shorthand for efficient...